Benefits of Corporate Social Responsibility

No longer is the term ‘Corporate Social Responsibility’ a novel idea amongst businesses. A 2011 sustainability study by MIT showed that sustainability, in the US at least, now plays a permanent part in 70% of corporate agendas.

How have Unilever achieved this growth? By being a responsible, sustainable business, they have saved money (energy, packaging, etc.), won over consumers, fostered innovation and have managed to inspire and engage their people.

Benefits of corporate social responsibility

The Unilever success story is well publicised, but it can be hard to identify with a business of such size. However, the great news is that even the smallest of organisations benefit when putting Corporate Social Responsibility (CSR) at the heart of their business, starting with small changes on a simple environmental policy list. Here goes a useful guideline on how tow write you environmental policy (template).

Whilst profit may be the end goal for any business, responsible businesses have managed to attract more investors, reduced their risks and addressed stakeholder concerns. With there barely being a day in the news where a business hasn’t made an embarrassing error of judgement, more interest is being shown in businesses demonstrating Corporate Social Responsibility (CSR).

The benefits from adopting CSR can be less obvious than say, helping the environment. For example, a survey from Net Impact found that 53% of workers said that “a job where I can make an impact” was important to their happiness. Interestingly, 35% would take a pay cut to work for a company committed to CSR.

Examples of corporate social responsibility

CSR isn’t about giving money to charity, or just asking people not to print emails for the sake of Mother Earth! First and foremost, businesses exist to make profit, and this isn’t meant to change as a goal. The reality is that no organisation operates in isolation; there is interaction with employees, customers, suppliers and stakeholders. CSR is about managing these relationships to produce an overall positive impact on society, whilst making money.

So how do you put CSR into action? Below are a few examples of what businesses around the World are doing.

Making ‘green’ fashionable: The Body Shop

The Body Shop forged a reputation as a responsible business long before it became fashionable. They were one of the first companies to publish a full report on their CSR initiatives thanks to founder Anita Roddick’s passionate beliefs of environmental protection, animal rights, community trade and human rights. The company has gone so far as to start The Body Shop Foundation, which supports fellow pioneers who would normally struggle to get funding.

Over 20 years ago the company set up a fair trade programme, well before the term ‘Fair Trade’ started to become popular on supermarket shelves. Of course, The Body Shop is famous for its anti-animal testing stance. Whilst this makes testing their products more difficult, especially in markets such as the USA and Japan, their position has created a loyal customer base. The results? From opening her first store in 1976, 30 years later Annit Roddick’s empire was taken over by L’Oreal for £652m, where it has continued to make annual profits of over £40m.

Putting the fun into CSR: Walt Disney

Moving beyond making cartoons, today the Walt Disney Company additionally owns the ESPN and ABC networks, holiday resorts and publishing businesses to name a few. The result is a lot of social and environmental impact, as well as the ability to influence a huge amount of people.

Importantly, Disney recognised that you can’t entertain a family on the one hand and then disregard the world and circumstances in which they live. Acting responsibly gives the company credibility and authenticity. Accordingly, they have set themselves strict environmental targets and disclose their figures in the Global Reporting Initiative which provides a comprehensive set of indicators covering the economic, environmental and ethical impacts of a company’s performance

A clear example of financially benefiting from reducing environmental impact is made with this simply statistic: a 10% reduction in the corporation’s electricity use is enough to power the annual consumption of 3 of their theme parks. Whilst their CSR efforts may have taken a great deal of organisation, dedication and investment, 2012 was a record year for Disney’s profits.

As you can see, a campaign like works fantastically from a number of different angles. Not only is it helping society as a whole, in keeping with the company’s CSR goals, it helps to show a human side to consumers, which can’t hurt sales. In fact, research shows consumers are more likely to pay a premium for a product linked to a charity donation.

How can CSR translate to a smaller business? The issues are the same, just on a smaller scale. The key is to start by conducting a review of what impacts your business has. This could be from environmental issues (energy use, waste etc.), to how your employees are treated, your supply chain and the local community. Below is a look at some examples a small business would recognise, and could act on.

Community

You can incorporate your staff welfare plans with your aims to boost community relationships too. If you’d like to support a local charity, why not let your staff vote for their favourite? It’s now common for businesses to allocate charity days where staff get hands-on with their chosen charity, the effects going far further than monetary donation.

In uncertain financial times, employment rates are always an issue. Could your business offer part-time work or training to those in long-term employment, or students looking for their first work experience?

It’s surprising when you break down your organisation’s activities to see how many people are affected by it. It’s also clear that CSR isn’t a cynical marketing ploy for big businesses; there are tangible benefits to be had by all. The key is not to treat CSR as an ‘initiative’, but to simply view it as the way you do business. Applying CSR is just redefining aspects of what you’re already doing; it needn’t be exotic or costly. Instead, start small and gain momentum.

Rob Fenn works at the British Assessment Bureau, a UK based Certification Body that specialises in environmental management standards. Whilst interested in all matters ‘green’, Rob particularly enjoys the challenge of helping smaller organisations realise the business benefits of sustainability and environmental responsibility, becoming a noted speaker and expert contributor in environmental management.

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9 comments

Jithin says
May 22, 2013

Very well written article. Not many understands that CSR is the DNA of business which incorporated would be benecifial to the business only…

Well i have carefully read your article, and i think its a key issue for the company to grow in benefit while taking into consideration the components part of its business, i.e, employees and the society!!!
Actually i am a CSR intern in a cameroonian company, and you would like to put in place a CSR process in place!! I need some advices!!
Thanks

Thanks Rob for this article, Doing good is good business indeed. Studies have shown that business operations are disturbed mostly by non technical issues all bothering on environmental, health and socials issues not considered early enough in business planning. In my opinion CSR equals sustainable development. Gone are the days when corporations ‘did good’ because of regulatory requirements, these days, apart from the media attention and stringent reporting requirements and stakeholder scrutiny, impacted communities are now more aware of business operations impact thanks to the Internet revolution , therefore even the smallest businesses have footprints that need to be considered early enough especially before execution.

You’re absolutely right that good CSR makes for good business! It’s not just a “part” of the organization, but is indeed a way of doing business in itself. Being socially responsible is a given in today’s society, and is expected as a norm by customers themselves. I wrote an article that sheds more light on this, feel free to take a look: http://blog.zopim.com/2013/09/10/the-bottom-line-of-corporate-social-responsibility/

I am a petroleum Engineer. Now Considering the drastic change in oil price, as we have seen over a year now,What recommendations would you make to my company (oil and gas ) which is seriously thinking of redefining its CSR policies?

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